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Office Market Report Luxembourg Q1 2016: Sharp return of banks

  • Take-up in Q1 came in at 72,000 sq.m., ie twice as much as a year ago and the best first quarter of the decade. Banks are back in the market with one mega deal, and a few mid-size transactions.
  • Vacancy rate increased to 4.59%, vs. 4.15% in Q4 2015 due to speculative completions in the CBD and Kirchberg. We expect further increase in the near term with more new deliveries. 
  • Prime rents stabilised at € 45 / sq. m. / month (+ vat), unchanged on a quarterly basis and up vs. € 42 / sq.m. / month (+vat) a year ago. Another increase is expected in 2016 in the best buildings under construction Boulevard Royal.
  • The investment market was quiet in Q1, the volume is estimated at € 72 Mln. Several mid to large size transactions are in preparation, 2016 will probably be a good year again. Prime yields were unchanged at 5%, potentially compressing below in the near term.   

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